Alchian on Keynes

Edward W. Fuller ()

The Review of Austrian Economics, 2020, vol. 33, issue 4, No 6, 503-511

Abstract: Abstract This paper examines Armen Alchian’s work on Keynes’s marginal efficiency of capital. Alchian is correct to assert that Keynes’s theory of investment based on the marginal efficiency of capital is flawed. However, Alchian does not emphasize the importance of Keynes’s error. This paper extends Alchian’s analysis to show that Keynes’s marginal efficiency of capital is a significant error.

Keywords: John Maynard Keynes; Armen Alchian; Marginal efficiency of capital; Net present value (search for similar items in EconPapers)
JEL-codes: E12 E22 E43 G31 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11138-019-00471-y

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